TMI Blog2018 (4) TMI 751X X X X Extracts X X X X X X X X Extracts X X X X ..... reason to impose any condition of part payment - an unconditional stay of recovery pending disposal of the appeal is justified. Petition allowed. - Writ Petition No. 1775 of 2018 - - - Dated:- 4-4-2018 - S. C. DHARMADHIKARI PRAKASH. D. NAIK, JJ. Mr. Prakash Shah with Mr. B. N. Mehta i/b. M/s. PDS Legal for the petitioner. Mr. V. A. Sonpal-Special Counsel with Mr. B.V. Samant-AGP for State. ORAL JUDGMENT :- (Per S. C. Dharmadhikari, J.) 1. By this petition under Article 226 of the Constitution of India, the petitioner challenges an interim order of the tribunal. The tribunal's interim order dated 11th August, 2017 directs the petitioner to pay a sum of ₹ 8 crores for the period 2009-10 and ₹ 4 crores for the period 2010-11. This is a pre-condition, on which there will be a stay against recovery of the tax pending the statutory appeal. 2. The petitioner before us filed appeals to the tribunal under the Maharashtra Value Added Tax Act, 2002 (hereinafter referred to as the MVAT Act ) styled as the Maharashtra Sales Tax Tribunal at Mumbai being VAT Second Appeal Nos. 560 to 563 of 2017. The four appeals were filed against the order d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isfied with this assessment order, four separate appeals were filed. There was another assessment order for the period 1st April, 2010 to 31st March, 2011, in which, identical findings were rendered, but the MVAT demand was ₹ 2,28,50,15,227/-. The deduction claimed under the CST Act was disallowed. The Joint Commissioner, before whom the appeals were brought (the first appellate authority), decided them by a set of orders styled as Exhibits 'J-1' and 'J-2' and Exhibits 'K-1' and 'K-2' of this petition. 5. Being aggrieved by these orders, four separate appeals were filed before the appellate tribunal, namely, Maharashtra Sales Tax Appellate Tribunal. The impugned order has been passed on the four applications seeking stay of recovery of tax during the pendency of appeals. 6. Mr. Prakash Shah appearing for the petitioner argued that the order of the tribunal suffers from a patent error of law. This error of law is apparent on the face of the record. The tribunal has overlooked the fact that the petitioner is engaged in a works contract. That works contract is of performing the works for the ONGC. The works have to be performed beyond 12 nau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rials, which are styled as goods, are then transferred, but the title in the same is not transferred, according to Mr. Shah, until the compliances as above are made. It is in these circumstances, he would submit that if the whole transaction is beyond 12 nautical miles, the materials are procured not in Maharashtra, but imported from outside Maharashtra are not brought in and are never sold in the State of Maharashtra, then, this tax was not leviable. Our attention has been invited to the findings in the order of assessment and in that of the first appellate authority, which, according to Mr. Shah, are erroneous. It is argued by Mr. Shah that the tax liability was worked out by the first appellate authority, but without assigning any reasons. He may have modified the assessment orders in exercise of his powers as a first appellate authority, but he has not adverted to any of these arguments and materials relied upon by the petitioner. 8. In fact, before the tribunal, a specific ground was raised and that is that the materials supplied to offshore sites of ONGC are in the form of export and hence not liable to tax in Maharashtra. Yet, the Deputy Commissioner/the first appellate a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. J. K. Surface Coatings (supra) are not identical. Mr. Sonpal would submit that in the present case, the tribunal, on par with other matters, brought to tax the goods sold within the State. The goods may have been brought during the execution of the works contract, but still, the title in the same has passed in the State of Maharashtra. The parties are situated in Maharashtra. The goods have moved from the State of Maharashtra. Therefore, there is sufficient nexus to hold that the goods are liable to tax under the MVAT Act. The further correct finding, according to Mr.Sonpal, is that section 4(2) of the CST Act would have no application to the facts and circumstances of this case. Thus, according to Mr. Sonpal, this is only an interim order rendering a tentative and prima facie finding. The condition imposed is also not onerous, but reasonable. In these circumstances, we must proceed to dismiss the writ petition. 12. We have heard both sides at some length and prima facie, we find that the MVAT Act has been applied by terming the transaction as a sale. Section 2(24) defines the term sale . By virtue of the Explanation contained in (b) (ii), even the transfer of property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to tax. Reliance was also placed on section 4 of the CST Act. Pertinently, section 4 of that Act refers and deals with such cases where a sale or purchase of goods can be said to be taken place out side the State. Thus, Chapter II is titled as Formulation of Principles for Determining a Sale or Purchase of Goods Takes Place in the Course of Inter-State Trade or Commerce or Outside a State or In the Course of Import or Export. That is a matter exclusively covered by the CST Act, 1956. Section 3 enables determination of the issue or question as to when is a sale or purchase of goods said to take place in the course of inter-state trade or commerce. That carves out a deeming fiction, but for that to come into play, there are certain conditions. The sale must occasion the movement of goods from one State to another or is effected by a transfer of document of title to the goods during their movement from one State to another. Then, there are various explanations and section 4 says by sub-section (1) that subject to the provisions contained in section 3, when a sale or purchase is determined in accordance with sub-section (2) to take place inside a State, such sale or purchase shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eum products such as High Speed Diesel Oil, Light Diesel Oil and Furance Oil to various incoming and outgoing vessels within or beyond the port limits of Mumbai Port. The shipping vessel places an inquiry for required quantity of High Speed Diesel with the assessee. Pursuant to the inquiry made by the customer, the assessee gives a quote for their supplies. On approval of quote, the shipping vessel places a purchase order/nomination with the assessee for the required quantity and the name of the vessel to which the supplies are to be made. On receipt of the purchase order from the shipping vessel, the assessee in turn places a back to back purchase order of the same quantity on any of the oil marketing companies such as M/s. Indian Oil Company Ltd., M/s. Bharat Petroleum Corporation Limited etc. to be sold to the vessel nominated in the purchase order. The controversy in that case was when such order is placed on the oil marketing company and it supplies the said high speed diesel, that gets loaded on to a barge. The barges have pumps fitted on it with a flow meter in order to pump out the high speed diesel to the vessel. After taking delivery of the high speed diesel from the oil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icate being issued. 20. The petitioner in this case raised specific grounds to challenge the assessment order and the order of the first appellate authority. The petitioner pointed out that it is responsible for the goods imported and procured until their use for executing the contract and during the course of which, an approval has to be granted by the ONGC. It is submitted that the goods supplied under the contract with ONGC for carrying out turnkey project on offshore sites is beyond 12 nautical miles. The entire finding in the order of assessment and the order of the first appellate authority is termed as vague because the matter has been approached in general terms. It is specifically alleged that the materials and equipments supplied are in the course of export and hence, not liable to VAT in Maharashtra. The petitioner specifically urged that the goods supplied to ONGC offshore site need to be transported to such sites by a sea vessel. The ultimate risk of the goods supplied to ONGC offshore site lies with the petitioner until the ONGC representative provides with final acceptance certificate to the petitioner for the work done. These facts were ignored and the goods were ..... X X X X Extracts X X X X X X X X Extracts X X X X
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